TheStreet.com's MIDDAY UPDATE
February 29, 2000
http://www.thestreet.com
Market Data as of 2/29/00, 12:59 PM ET: o Dow Jones Industrial Average: 10,114.12 up 75.47, 0.75%
o Nasdaq Composite Index: 4,671.20 up 93.35, 2.04%
o S&P 500: 1,361.68 up 13.63, 1.01%
o TSC Internet: 1,178.80 up 24.25, 2.10%
o Russell 2000: 572.16 up 14.48, 2.60%
o 30-Year Treasury: 100 31/32 up 5/32, yield 6.169%
In Today's Bulletin:
o Midday Musings: Nasdaq Reasserts Leadership Role While Dow Draws Skepticism
o Herb on TheStreet: How Salton Peppers the Press With Puff
Also on TheStreet.com:
Wrong! Tactics and Strategies: The Micron Battleground
The trader's always been afraid of the way this stock moves.
http://www.thestreet.com/comment/wrongtactics/891970.html
SiliconStreet.com: The Would-Be Man of Steel
Michael Levin's e-Steel, like all B2B plays, is a great concept. But he's not the only one eyeing the opportunity.
http://www.thestreet.com/comment/siliconstreet/891758.html
Market Features: The Hidden Bear Market: Investors Worry That Hibernation Is Almost Over
If tech starts to suffer, where are investors to go?
http://www.thestreet.com/markets/marketfeatures/891808.html
Brokerages/Wall Street: DLJ Lockup Policy Aims to Ease Dumping 180 Days After IPOs
The investment bank experiment would allow venture capitalists to sell stakes at intervals, only if the stock has appreciated.
http://www.thestreet.com/stocks/brokerages/891532.html
Midday Musings: Nasdaq Reasserts Leadership Role While Dow Draws Skepticism
By
Thomas LepriStaff Reporter
2/29/00 1:03 PM ETAfter yesterday's rare relief bounce in some beaten-down blue-chip names, most of the action has come back to where the market expects it.
| Major Indices | | INDEX | CHANGE | % | VALUE | | Dow |  
70.73 | +0.7% | 10,109.38 | | S&P 500 |
13.86 | +1% | 1361.91 | | Nasdaq |
94.76 | +2.1% | 4672.61 | | Russell 2000 |
14.16 | +2.5% | 571.84 | | TSC Internet |
23.44 | +2% | 1177.99 | | NOTE | CHANGE | PRICE | YIELD | | 10-Year Treasury | 
2/32 | 100 17/32 | 6.426% |
|
The latest in the prodigious history of huge technology rallies had the
Nasdaq Composite Index flying in record territory near midday. The Comp was up 95, or 2.1% to 4673, benefiting from strong performances from super-components like
Cisco (CSCO Quote) and
Intel (INTC Quote), not to mention another massive surge in
3Com (COMS Quote). The index was on pace to set a closing record.
3Com has been lighting up the Nasdaq this year ahead of the initial public offering of its
Palm (PALM Quote) unit, which raised its price range to $30-$32 a share from the original $14-$16 a share. 3Com plans to shed the remainder of its Palm holdings -- about 532 million shares -- by distributing them to existing shareholders.
3Com was up 10 7/8, or 13.8%, to 89 15/16.
Gains were more moderate in the broader big-cap market, with the
S&P 500 up 14, or 1%, to 1362. The
Dow Jones Industrial Average, meanwhile, was up 71, or 0.7%, to 10,109.
You'd think that traders would be heartened by the fact that the Dow was faring as well as it was. Profit-taking in the proxy's financial components was minimal to nonexistent, with
General Electric (GE Quote) and
Citigroup (C Quote) each extending their strength, while
American Express (AXP Quote), which had surged 6.5% yesterday, was suffering mere fractional losses.
But sentiment is tepid at best.
"A minor bounce" was how Sam Ginzburg, senior managing director of equity trading at
Gruntal, bluntly characterized yesterday's rally in the Dow. "We're not there yet. Not a believer whatsoever. Any stock with a three-letter symbol, you don't want to own it."
That negativity is underpinned by what has become a fairly unambiguously hostile interest rate environment. Make no mistake, there are those who think the market has gone too far in discounting future rate hikes, that we're closer to the end of the Fed's tightening cycle than the beginning. But most traders remain cautious.
The latest
Reuters poll shows about three-quarters of primary dealers of government debt thinking that the
Federal Reserve will raise the fed funds rate by 25 basis points at each of its next two meetings. And
Alan Greenspan's recent
Humphrey-Hawkins testimony didn't suggest to anyone that the Fed would likely stop there.
"It's very uncertain," Boockvar said. "You've still got the rest of the year facing rate hikes. And we've got an inverted yield curve. The banks don't make any money with an inverted yield curve." Any narrowing (much less inversion) in credit spreads puts pressure on banks' bottom lines because they borrow short-term and lend long-term.
The bond market was little changed, with the benchmark 10-year Treasury down 2/32 to 100 17/32, putting its yield at 6.43%. The 30-year Treasury, meanwhile, was 9/32 higher to 101 3/32 and yielding 6.17%. Bondsmen weren't particularly stirred by this morning's
Chicago Purchasing Managers' Index, which came in at a softer-than-expected 56.7 for February. (For more on the fixed-income market, see today's
Bond Focus.)
While banks were mixed, brokerage stocks were running hard. The
American Stock Exchange Broker/Dealer Index was up 3.2%, with
E*Trade (EGRP Quote) and
Lehman Brothers (LEH Quote) each up more than 5%.
What can you say about the biotechs? Just that the
American Stock Exchange Biotechnology Index was up another 5.2%. BTK component
Protein Design Labs had picked up 24, or 11%, to 242.
Semiconductor stocks were soaring, led by another eye-popping gain in Rambus, which has been bursting higher session after session on momentum and optimism over the upcoming release of
Sony's (SNE Quote) PlayStation 2, whose DRAMs, made by
Toshiba, are based on Rambus technology. Rambus was lately up a whopping 51, or 21.2%, to 292.
Rambus isn't alone up there today: The
Philadelphia Stock Exchange Semiconductor Index was up 7.8%. The chips were getting lift from
Deutsche Banc Alex. Brown's Erika Klauer, who wrote today that the market is at "the beginning of a substantial semiconductor industry up-cycle." Klauer resumed coverage of
Altera (ALTR Quote),
Atmel (ATML Quote),
Xilinx (XLNX Quote) and
Micron Technology (MU Quote).
The smallish-cap
Russell 2000 was flying up 14, or 2.5%, to 572.
Net stocks were also boffo, with the
TheStreet.com Internet Sector index up 23, or 2%, to 1178.
Market Internals
Breadth was positive on strong volume.
New York Stock Exchange: 1,610 advancers, 1,222 decliners, 619 million shares. 56 new 52-week highs, 94 new lows.
Nasdaq Stock Market: 2,454 advancers, 1,509 decliners, 1.1 billion shares. 332 new highs, 65 new lows.
For a look at stocks in the midsession news, see Midday Movers, published separately.
Herb on TheStreet: How Salton Peppers the Press With Puff
By
Herb GreenbergSenior Columnist
2/29/00 6:30 AM ET
Hyped to the hilt: Nobody can ever accuse
Salton (SFP Quote) CEO Leon Dreimann of not looking out for his shareholders. Only it's the way he does it that may (or should) make some investors queasy. The unwritten rule of corporate America is for companies
not to publicly hype their stocks. It looks bad. It smells bad. And it usually ends badly.
Yet, that's just what Dreimann, whose company was
recently chided here for getting a tad too aggressive with retailers, has been doing lately. For example, in an interview with
Reuters on Feb. 18, he bragged about how the company would beat Wall Street estimates for the current fiscal year.
Then he discussed concerns that the company won't be able to continue the phenomenal growth it has experienced, thanks to the George Foreman Grill, saying:. "The momentum can be maintained through mergers and acquisitions and changing the company from a small-cap to a mid- to large-cap, but it's difficult to do that when the stock price, which is normally used as an asset to make acquisitions, is so far below its market."
The interview did nothing for the stock, so (surprise, surprise) a few days later Salton issued a press release reiterating what Dreimann said in the
Reuter's interview, with this additional twist: "Salton," Dreimann said, "was also recently cited as one of the highest-rated stocks, based on analyst comments contributed within the past month to
First Call's database."
Recently cited as one of the highest-rated stocks?! It's easy to understand why the guy is proud, but that's just
not the type of thing companies usually brag about in public.
For good reason: It's called touting your stock, and shareholders tend to take it personally if the company doesn't live up to the hype. As for being the highest-rated stock, analysts are often wrong. What's more, it especially looks bad if the company is trying to do some kind of offering of its stock which (oh, didn't I tell you?) is just what Salton has been telling Wall Street it intends to do in the way of a private offering.
But, then again, Salton has never been shy of being promotional, so at least you can say they're consistent.
A Salton spokesman said company officials were unavailable for comment.
Message board melee: Reader
Jim Higgins, who has never read message boards, made the mistake of venturing onto one of the
Cell Pathways (CLPA Quote) message boards (not on our site) over the weekend. "I was shocked at the messages," he relates. "Threats, name calling, misleading Information ... very scary ... It was amazing to see the message-board responses (to several, recent negative reports).
FBI probes? Death threats? If the
SEC wanted to investigate price fixing in a particular industry, let them take a good look at these boards."
Like the
Hostile React-O-Meter, it's outa control,
outa control, I tell ya. Finally, short stories: If you've been whooping it up because just about every short-seller I know has been squeezed to the point of shutting their doors, as some I believe are close to doing, remember that when the shorts are gone, so is the natural cushion that keeps stocks from going into free-fall.
Eeeeeeehw! (That's the popular message board rallying call, "wheeeeeee" -- in reverse.)
Herb Greenberg writes daily for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, though he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. He welcomes your feedback at
herb@thestreet.com. Greenberg also writes a monthly column for Fortune.
Mark Martinez assisted with the reporting of this column.
Copyright 2000, TheStreet.com
